Workers operate at a workshop of a lithium battery company in Zaozhuang, east China's Shandong Province, Jan. 3, 2024. [Photo/Xinhua]

China's long-awaited legislation on promoting the private economy made decisive progress on Thursday as authorities started soliciting public opinions on a draft law, marking a major step forward in reinvigorating a sector key to the growth of the nation, experts said.

They said the move reflects the government's emphasis on and support for the private economy, which will not only provide legal protection for private enterprises, but also clarify the government's responsibilities in promoting the healthy development of the private sector.

The draft law, jointly released by the Ministry of Justice and the National Development and Reform Commission, will be open for public comments until Nov 8.

"The draft law not only confirms the key role of the private economy, but also provides institutional guarantees and support through legislation," said Liu Dian, a researcher at Fudan University's China Institute.

"It marks the country's latest push for improving the market economy system. Once implemented, it will effectively stimulate the vitality of private enterprises and encourage them to participate in competition and cooperation across a broader range of sectors, thereby promoting overall economic growth in the long run," he added.

According to experts, the draft law marks China's very first basic legislation regarding the development of the private economy, and it aims to create a better environment that fosters fair competition, facilitates private investment, supports technological innovation, and protects the legal rights and interests of private businesses.

In a statement posted on its official website on Thursday, the NDRC said the move will help stabilize market expectations and boost business confidence, reflecting China's commitment to ensuring long-term, high-quality growth of the private economy.

Comprising 77 articles across nine chapters, the draft law seeks to codify into a legal framework key policies and practices aimed at fostering the development of the private economy. It underscores equal treatment and protection for private enterprises while promoting their regulated and healthy growth.

According to the draft law, in areas outside the negative list, all types of market entities including private enterprises are legally allowed equal market access. It also calls for the promotion of fair participation by private enterprises in market competition and their equal access to production factors.

Hong Yong, an associate research fellow at the Chinese Academy of International Trade and Economic Cooperation, said the draft law highlights comprehensive coverage of all aspects related to promoting the development of the private economy.

There are "clear provisions" in the draft law, "from ensuring the correct direction of development to specific implementation measures", he said.

Citing specific measures to improve the investment and financing environment for private businesses and support their technological innovations, Hong said that such steps will help reduce operational costs and encourage these enterprises to participate in technological advancements and industrial upgrades.

Under provisions included in the draft law, China will encourage private enterprises to play an active role in the development of new quality productive forces, ensure their legal involvement in setting standards as well as in the development and use of public data resources, and strengthen the protection of their intellectual property rights.

Shen Bing, director-general and a senior research fellow at the Chinese Academy of Macroeconomic Research's market and price research institute, said that implementing a private economy promotion law is essential for ensuring fair competition among enterprises of different ownership structures, as it helps provide an enabling business environment.

Efforts to implement the law will work with other ongoing policy moves, such as improving relevant regulations to guarantee payments to small and medium-sized enterprises, in easing the burden on enterprises, improving their operational conditions and vitalizing the broader economy.

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